Real Time Information (RTI) is being introduced to improve the operation of PAYE. It will make the PAYE system easier for employers and HM Revenue & Customs (HMRC) to operate, and employees will receive information more quickly. Using RTI, employers and pension providers will tell HMRC about tax, National Insurance contributions (NICs) and other deductions when or before the payments are made, instead of waiting until after the end of the tax year.
Under RTI, employers and pension providers are required to complete a new style form P46 (short) for collating information on employees. This will be used to complete the starter information which will be sent to HMRC as part of the RTI payment submission, with details of the employee’s first payment, when the payroll is run. The P46 (short) form does not need to be sent to HMRC. Similarly, a P45 is no longer required to be sent to HMRC when an employee leaves, however, the employee will still receive a copy of their P45, part of which will go to their new employer
Using RTI will also mean that employers and pension providers will no longer need to complete an end of year return (P35 and P14) or P38A supplementary return, as they will tell HMRC about all payments made each time their payroll is run.
If we prepare your payroll, you will have been enrolled into the RTI pilot scheme, with the exception of employers with subcontractors, who will join in April 2013.
A key aspect of the process is the requirement to have up-to-date accurate information for each employee; this includes:
- Full name
- Date of Birth
- National Insurance Number
- Gender, and Address
The above information is vital for processing any new starters you employ. We will also need to be informed of the number of hours each employee works and the date on which they will be paid.
Under RTI, all employees (who are 16 or over) who receive payment from a company must be processed through the payroll. This includes casual workers and students which means there is no longer a need for P38A or P38S forms.